Y Combinator grad CEO James Beshara lets his engineers apply to work from anywhere in the world. The effect has been transformative.

By Luke Dormehl9 minute Read

We all know that vacations can help us return refreshed, but the whole idea is that they’re a temporary respite. But Crowdtilt is taking the restorative qualities of the vacation to their next logical conclusion.

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They’re called Hackations, and they work like this. Engineers are allowed to take a week away from the office, to travel anywhere in the world to get their work done faster. The engineer pays for his or her own plane or train tickets, but Crowdtilt covers the rest.

“Like everything we do here at Crowdtilt, the hackation came to us through experimentation,” says Beshara. The company just went through a major engineering push to launch CrowdtiltOpen, a free-to-license crowfunding platform based on its own technology. The hackation concept came to them as a panacea for stress.

“We were still at 12 people at the time, working in a tiny little converted apartment that was our first office space,” he says. “Even with just 12 people, there were already a ton of meetings and other distractions going on. At the time, we had a really serious deadline that we needed to hit. It was a week away, and we knew we needed three engineers to hammer out the last 10% of it.”

Ten percent may not sound like much, but Beshara knew that at the current pace it was at least three weeks’ worth of work.

“We rented out an Airbnb [apartment] and sent three engineers out of the office to work in it,” he continues. “Not only did the project get finished, but they actually came back energized. They got to do what they love doing–which is writing software–and they got to do it 12 hours a day with no distractions. This was before we formalized the concept of a hackation, but the idea started right there.”

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“The aim was to build a whole new API, complete with new interface,” says Will Wolf, Crowdtilt’s newly promoted director of technology. “We thought it was pretty ambitious. We felt that it was likely to take a minimum of two weeks, probably three. We ended up getting it done in six days.”

Nine months later, the so-called “hackations” have been officially added as part of Crowdtilt’s business plan. Anyone can apply to take one–and so far the results have been extremely positive.

“Everyone’s best work is done when they don’t feel that it’s work,” Beshara says. “In a typical day at Crowdtilt you may be called into three or four different meetings. If your focus is broken up regularly, that can kill a day. If you know you have a meeting in 30 minutes it means that you’re no longer focused. Then when you get back to your desk from the meeting, you’re distracted by everything you’ve just discussed. Trying to re-engage and refocus can be extremely draining. Even though it’s only a few short meetings out of an entire day, the zone that all of us look to get into [to work effectively] is completely disrupted.”

Crowdtilt isn’t the only tech company to loosen the strings on its engineers, of course. Google famously created some of its best innovations–including Gmail, AdSense, Google Reader, and Google Talk–by giving engineers 20% of their time each week to pursue passion projects, although it ditched the policy last year.

While coding away in a deserted beach hut, or overlooking Venice’s Grand Canal, seems like a typically flamboyant startup indulgence, Beshara says that from a business perspective it actually proves to be a cost-effective strategy.

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“The costs offset themselves remarkably well,” he says. “If people are able to knock something up in one week that might have taken three weeks, it’s absolutely worth it when you factor in the extra two weeks that a product can be out there in the open earning revenue. We’ve got an application at the moment to send some engineers to Costa Rica, and once you add up all the costs it’s only around $2,400. That’s absolutely worth it to be able to accelerate a particular project.”

“There is a process to the idea, and that’s what gives it integrity,” Beshara says. “It can’t just be a matter of someone not coming into work because they’re now working from the beach in Southeast Asia or something like that. The application process is pretty simple: We ask how long it will take someone to complete their work according to the current estimate in-office; where they’re planning to go and work if the hackation is approved; and how have they performed on hackations before?”

This last point is the most important.

“When you get back from the hackation, at noon the next day you have to present your work to the company–and it’s got to be production ready,” Beshara continues. “It has to be tested, finished, and seconds away from being deployed in the product. If you miss that deadline then it’s very unlikely that your application will be approved for the next hackation.”

A hackation is about more than just a reward for doing good work. New locations can offer up new ways of thinking about certain problems. High tech is full of stories of problems that were solved in new ways because of some outside stimuli. For example, Steve Jobs and Jony Ive came up with the idea for the G4 iMac’s elegant appearance while looking at the sunflowers in Jobs’s garden.

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“Every year I do something wild with the garden, and this time it involved masses of sunflowers, with a sunflower house for the kids,” Jobs’s wife told biographer Walter Isaacson. “Jony and Steve were riffing on their design problem, then Jony asked, ‘What if the screen was separated from the base like a sunflower?’”

A few designs later, and an iconic computer was born. Would Jobs and Ive have come up with the same solution had they been sitting in his office at the Apple Campus in Cupertino? Possibly, but they didn’t–it was dreamed up in a garden filled with sunflowers.

“Physical spaces have a massive effect on the output of work,” Beshara says. “How loud or quiet is your office? How close are you working next to people? There’s a huge amount of work available on this subject, and it’s something that has dictated how we design our office space. But I’d also take this a step further and suggest that being outside the office altogether, in a brand-new environment, allows people to think about problems in drastically different ways.”

He points to a recent working holiday in Hawaii (his first vacation in two years), during which he was able to take a step back and reevaluate several important strategic decisions for Crowtilt.

“I’d hope that a drastically new location brings with it a drastically new perspective,” he says.

There is a degree to which any startup built by young founders–without a whole lot of big business experience behind them–is built on naivete.

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“There are a lot of pros and cons being young founders setting up a business,” Beshara says. “I had no business company experience whatsoever coming into Crowdtilt. What that means is that as a young founder you can approach starting a company with a pretty clean slate. In our case, there were a few different things that we did, where it didn’t even really factor into our thinking that these weren’t things that other companies weren’t doing. We set out to create our own original, unique culture–based on the things we felt would help our team be as productive as possible.”

For a while, Beshara and his cofounder, Khaled Hussein, worried about trying to incorporate all the established rules they could find into their existing company framework. Then they had a revelation.

“We did a lot of things that were by the book, and it was about a year in that we realized, Hey, nobody’s ever built a company like this in March 2014 before.” Beshara says. “If that’s the case, then it’s absolutely worth reassessing how things were done before, and whether this still makes sense to apply the same logic going forward.”

This is where a concept like the hackation comes in. “Something like that wouldn’t have been possible 10, 15, or 20 years ago,” Beshara continues. “All of the data and anecdotes about companies built then–when you had to have a CPU tower tied to a desk, when you had to have a massive monitor, when you had to have paired programming, where you were sitting right next to the person you were programming with–are open to questioning. Now you have things like Git, or a MacBook Pro, which is more powerful than almost any CPU tower someone would buy today. You have so many more tools at your disposal for remote working. You really don’t have to do things like they were done in the past.”

Like the best product features or technologies, these approaches can’t simply be bolted on to an existing company model, but must instead be a part of the company’s underlying ethos and philosophy if they’re going to be successful in the long run.

“When you’re a startup, the only real advantage or core competency that you have over incumbent businesses is speed,” Beshara says. “You have to optimize in a way that makes it possible for you to move fast. Going into Crowdtilt our mentality was always about how we can ensure that we can continue to move as fast as possible, and also how we incorporate that idea into the structure of the company.”

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“From the beginning, that’s been a part of the company–whenever we needed to crank out a new feature or a whole new product we can just lock ourselves in a room to churn out code really quickly,” says Will Wolf. “We’ve always tried to eliminate distractions, turn off our phones, not check our email, and just spend a few days focused completely on a project. We’ve done this since the beginning of the company, without really even thinking about it. It’s just what works.”

Beshara says that it ties neatly into the company’s theme of servant leadership. At Crowdtilt the org chart is, quite literally, printed upside down, with Beshara and cofounder Hussein at the bottom. “It’s clear to everyone in the company that their role is not to climb up the ladder, but to serve the greatest number of people and to help them excel at what they do,” Beshara says.

The concept of servant-leadership was first coined by business theorist Robert K. Greenleaf in a 1970 essay, entitled “The Servant As Leader.”

“The servant-leader is servant first,” says Greenleaf, author of Servant Leadership: A Journey Into the Nature of Legitimate Power and Greatness. “It begins with the natural feeling that one wants to serve, to serve first. Then conscious choice brings one to aspire to lead. That person is sharply different from one who is leader first, perhaps because of the need to assuage an unusual power drive or to acquire material possessions.”

The concept of servant leadership applies in the case of Crowdtilt’s hackations because it is about empowering employees. “It flips around the way we think about problems,” Beshara says. “If you were to tell a software engineer that they needed to have something completed within a week it could be a major source of depression or anxiety to them. However, if they come to you and say, ‘Hey, this project is scheduled to be finished by mid-April, but I know it could be done by March 18.’ Psychologically it completed reverses the roles.